Business and the Law Essay Example | Topics and Well Written Essays - 1250 words

Business and the Law - Essay ExampleFor example in Carlill v Carbolic Smoke Ball C. 1893 is was held that there would be consideration even if the promise suffered an stretch forth by using the advertised smoke ball under the directions of the promisor and the promisor had not incurred a benefit. As Selwyn LJ noted, any act which either confers upon the promisor a benefit or any detriment, or inconvenience to the promise will amount to consideration.2 Essentially, consideration is an act or exchange of promises or bargains from which a nag pro quo outcome can be inferred.3 There is no consideration where there is a sheer gratuitous promise with no exchange of promises.4 Giving the broad meaning of consideration in the right of pore, a collateral contract satisfies the requirement for consideration. It was held in De Lassalle v Guildford 1901 that there is consideration when the promisor promises to get in into the principal contract.5 It therefore follows that not only do colla teral contracts require consideration, they by necessity address consideration. ... For instance in relationship based upon the requirement of confidence and trust, there is a presumption of extravagant influence. However, fiduciary relationships and relationships characterized by inequality in bargaining positions will not automatically break in rescind to a presumption of undue influence.7 In this regard, it is not likely that ordinary contracts amid banks and consumers will give rise to undue influence sufficient for voiding a contract. The specific facts of the case will view whether there was undue influence. For example in Lloyds v Bundy 1975 QB 326, an senescent farmer with no business have intercourse provided the plaintiff with three guarantees in favour of a loan for his sons failing business. The aging farmer had not been told of the gravity of his sons business failings and was not the recipient of neutral wakeless representation. The loan failed to save the son s business and the plaintiff took action to realize the loan by taking possession of the aging farmers farm. The court ruled that there had been undue influence.8 The inequities between the bank and the elderly farmer in circumstances where there was essentially undue influence on the part of the bank, can give rise to unconsionability under discussion section 51 of the Trade Practices Act 1974 (as amended). Section 51 of the Trade Practices Act 1974 demonstrates the close relationship between unconscionability and undue influence.9 Essentially, Section 51 permits remedies for the consumer in circumstances where bargaining is conducted with the result that its corresponding agreement or the conduct during bargaining is unconscionable. A contract is unconscionable where one party is stronger than the other and asserts his will on the weaker party so